MARKET TREND FOR TODAY
July 11, 2012
The Markets saw a bit spurt yesterday in the second half of
the session as it once again attempted to give a break out on the upside as it
reversed the Monday’s losses and ended the day with decent gains. The Markets
opened on moderately positive note and traded with capped gains for the major part
of the session. The Markets, however saw a big spurt in the last hour and half
of the session as it not only tried to give a upward breakout as it gave its
day’s high of 5348.55, but it also maintained those levels as it ended the day
at 5345.35, posting a decent gain of 70.20 points or 1.33%. The volumes traded
remain slightly on the higher side of the average. It has formed a higher top
and higher bottom on the Daily High Low Charts.
Though the Markets have attempted to give a upward breakout,
it is expected to open again on a mildly negative note and consolidate again.
The lead indicators suggests that the Markets will consolidate a bit more
before it gives a sustainable breakout. The intraday trajectory, therefore,
would again remain critically important as it is likely to dictate the trend
for today.
The levels of 5360 and 5390 shall act as immediate
resistance on the charts whereas, the levels of
5290 and 5265 are expected to act as supports.
The RSI—Relative Strength Index on the Daily Chart is
67.9631 and it does not show any failure swing. However, the NIFTY has given
its 14-day high while the RSI has not, and this is Bearish Divergence. The
Daily MACD, however, continues to trade above its signal line.
The NIFTY and Stock Futures too have continued to end the
day adding in net open interest. Therefore, fresh longs have been added and no
major unwinding at higher levels is seen.
However, given the reading of the lead indicator, there are
very clear chances that the Markets continues to consolidate again, before
giving a clear sustainable up move. There are chances that we see the Markets
mildly correcting or consolidating in a range again, and therefore minor bouts
or minor phases of profit taking many not be ruled out. This is also likely to
keep the Markets in a range, and also bit volatile.
All and all, though there is no structural sign of a
weakness on the Charts, mild consolidation cannot be ruled out. However, again,
shorts should strictly be avoided but at the same time, profits should be protected
wherever necessary. Also, selective purchases may be made as the overall bias
continues to remain on the upside. Overall, cautious optimism is advised for
today.
Milan
Vaishnav,
Consulting
Technical Analyst,
+91-98250-16331
